Do you think your 401K is safe? Attorneys have told me in the past that short sale lenders won’t touch your retirement money.   Guess what?  FALSE! Today a Bank of America negotiator asked me to have my seller liquidate HALF his retirement account to get his short sale approved.

The seller has a $400,000 loss on a short sale property in Destin, Florida.   We have been in the short sale process for fourmonths.  Today the negotiator said the file will not be approved unless he liquidates half his IRA for a $70,000 contribution.   She said he has “some” income, although he has lost most of it because he is in sales….   His wife was laid off last week.  There are no other funds.  That is irrelevent to Bank of America.  His wife’s name is not on the loan.

I asked the negotiator, “Why would someone agree to give up half their retirement?   They could refuse, then your company will have to pursue a deficiency judgment to try to get the $70,000 after a foreclosure .”   She could not answer me, and I have yet to figure out the logic.   $10,000, $20,000? OK, that makes sense.   But half of someone’s retirement account?   I can see how a seller might “roll the dice” and say “no” to the short sale, not give up $70,000, then wait and fight after a foreclosure.   It might cost them $20,000 in attorney’s fees, but they might also save $40,000, not too shabby in this economy. I say if this is a trend, many sellers will take their chances with foreclosure.

What do you think?

It’s Wendy!

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR     Rulnick Realty, Inc.

Destin FL Real Estate

Destin Short Sales & Pre Foreclosure Help.

Read Destin Real Estate Blog

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email Wendy to sell your home or buy a home: itswendy@rulnickrealty.com

The post Short Sales- Bank of America May Ask for Your Retirement Account first appeared on Rulnick Realty.

As a short sale listing agent in the Destin Florida area, I tend to get the same type of offer again and again.  The buyer asks for all closing costs to be paid by the short sale lender.  So, on the most recent offer on one of my short sale listings, of course the buyer’s agent pressed for having Countrywide, now Bank of America, pay all the closing costs.  I have been through this numerous times before.  The agent tells me they “had one case” where all the costs were paid.  Or they say they “heard” the short sale lenders would cover all the costs if the offer price was raised.  I have to always leave the final decision to my seller, but I recommend against going down this path. 

To placate this agent, I emailed my favorite Bank of America negotiator, specifically asking what closing costs would be paid.  This is her response:

“We pay all outstanding property taxes, commission (amount depends on loss and investor), $3,000 to any outside 2nd lien, settlement or escrow fee, title insurance, doc stamps. We typically do not pay any miscellaneous type fees (wire, courier, admin, doc prep, notary, home warranty, etc.). All fees are negotiable depending on the loss and investor and is up to each individual negotiator as to what fees will be paid.  It is also at management’s discretion when a decision is made.”

At the insistance of the buyer’s agent, who asked if the buyer could increase his offer price to “cover” more closing costs, the Bank of America negotiator said: “No, they usually still will not pay those items.”

99% of the time, if you submit a short sale offer asking for all the closing costs to be paid, you will get rejected or countered.  Why waste sixty to ninety days for nothing?  Submit a good offer, one that you know can get approved, and increase your chances of short sale success.

It’s Wendy!

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR     Rulnick Realty, Inc.

Destin Florida Real Estate

Destin Short Sales & Pre Foreclosure Help.

Read Destin Real Estate Blog

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email Wendy to sell your home or buy a home: itswendy@rulnickrealty.com

Call Wendy Rulnick, Destin real estate agent, to list and sell your home or condo or help you buy a home or rental property on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County-  Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field.   Wendy is a short sale and pre-foreclosure specialist and can help you sell or buy a short sale property in and around Destin Florida and the Emerald Coast.

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The post Short Sale Closing Costs- What Will The Banks Really Pay? first appeared on Rulnick Realty.

I have a house listed for sale in the Mack Bayou area for $187,100.  The sellers had purchased the home as an investment property but were no longer able to cover the mortgage, as rental rates have decreased on the Emerald Coast.  The home needs work- carpet, paint, etc, and has about six tenants living in it.  After four months of gently lowering the price, and still no offer, we were sitting below what typical market value might be. 
Lucky for us, we got an offer for $185,000!  The first time home buyers were SO excited and loved the home.  Per my recommendation, and since it was Countrywide, their agent structured the contract for a 120 day short sale approval timeline, the buyers put down earnest money, and we eliminated closing costs we know Countrywide won’t usually pay.  The package was submitted.

A few weeks later, I found out during my bi-weekly phone call to Countrywide, that the file was “closed” due to “insufficient offer”. I was dumbfounded.  Yes, the offer was a bit below some of the competition, at about $195,000- $200,000, but not low enough that the file should be “closed” and not even countered.  I did two things.  I contacted a negotiator who had helped me in the past, and I called the short sale department again.  The representative was very helpful, and listened carefully as I explained my bewilderment at the file being closed.  She gave me her email address and I sent in my comps indicating the price was not that far off. I sent the same to the negotiator. A few days later, I got a call from Countrywide.  They told me the file would be re-opened, and suggested the buyers increase their offer by $5000.  We did it.

A couple weeks later, the Countrywide Phase II negotiator told me the offer was still too low, “Could the buyers come up by another $10,000, to match the appraisal?”  The buyers said “no”.  The negotiator said the investor also might require a promissory note, or it would be declined anyway.  I told him the couple had no money, were self-employed and barely getting by.  I also had their primary residence for sale as a short sale.  He said he would submit the package as is and see what the investors would do.

One week later – APPROVED!

In summary, do not give up if you have a strong case. I could have said “OK” when Countrywide told me they closed the file.  I could have put the home back on the market, and waited for six months for another offer.  The buyers would have lost their home.  The sellers may have gone into foreclosure. Countrywide would have gotten even less in the future.  So don’t let the negotiator close the file or close the door on your sale!  Submit a strong offer, one that YOU can justify.  Tell them to let the investor decide.  You may be pleasantly surprised.

The post Santa Rosa Beach Florida Short Sale – Success Story first appeared on Rulnick Realty.

This is a true story.  You may have thought you heard all the crazy stories you could about Countrywide and short sales, but you haven’t. 

Countrywide  approved a short sale for a Destin Florida condo for $100,000.  Wonderful. The buyer, who had applied for a loan with Countrywide, proceeded to finalize his own mortgage to close. Countrywide ordered the buyer’s appraisal.  The condo only appraised for $87,000. Countrywide will not give the buyer a loan for $100,000.

I called the Countrywide short sale department to let them know that their Countrywide mortgage department would not issue a loan for the approved amount of $100,000, and faxed them a copy of their own appraisal for $87,000. They said their was nothing they could do and closed the file.

We now must re-submit a new short sale.  This is so insane, that I am almost speechless.

It’s Wendy!

The post Countrywide Approves Short Sale- But Denies Buyer Loan Due to Underappraisal first appeared on Rulnick Realty.

The post Destin Florida Short Sale – Approved in 7 Weeks first appeared on Rulnick Realty.

I have read many of your articles regarding Destin real estate and  short sales.  I have made an offer to buy a short sale in October and we are still waiting.  The house is brand new, it’s listed for $799,000.  The builder owes over $700,000.  The house is not finished, it needs countertops, appliances, driveway, painting, finish hardwood floors, etc.  Approximately $100,000 is necessary to complete house.   A home 2 doors down just sold for $540,000.  This new house is the nicest house in the development but definitely not worth $800,000.    In our opinion even though it is the nicest house it probably is still not worth more than $600,000 to $650,000 that’s if it was completed.

I originally offered $500,000 but now want to reduce my offer to $450,000 since it needs $100,000 to fix up and the Destin real estate market is still falling.  The negotiator is assigned and they will do an appraisal or BPO within 30 days.  I feel $450,000 is fair given the changing market. Do you know typically how much Countrywide will go below market value, especially on an unfinished house?

Thanks,

Joe

Hi Joe,

Countrywide will not “really” go much below market value.  They will rely heavily on the Broker Price Opinion (BPO) or appraisal, as I wrote in ‘Short Sale Pricing: The “X Factor”‘ and will want close to that figure. Their calculations will depend on who the end-investor is on the loan, and those specific requirements.  For example, if the loan has mortgage insurance (MI), they might want the “Net Proceeds” to be 91% of appraised value sometimes! One thing you cannot control is the BPO or appraisal, but you can inform the party doing the appraisal of cost estimates to finish the house.  That may help keep the end figure realistic.

If you reduce your offer now, Countrywide might close the file.  That will depend on the negotiator.  Sometimes Countrywide relies on a valuation they have in their system already, and if the offer is below it, they will just cancel the file.  Then you will have to start all over, and again risk the file being cancelled because you are too low.

Your concerns make sense and are valid.  If you think you are overpaying for a property, I’d use caution.  Best of luck.

The post Destin Real Estate Buyer’s Short Sale Concerns first appeared on Rulnick Realty.

The post Short Sale Seller: "I Just Want OUT!" first appeared on Rulnick Realty.

Latest Countrywide Short Sale Volume

While working on a Crestview FL short sale today, I asked the Countrywide rep, “How many short sales do you have in process?”

Countrywide Rep Answer:  “Almost 70,000”

The post Latest Countrywide Short Sale Volume first appeared on Rulnick Realty.

Property:   Single family home in Navarre Florida- an investment property with tenants

Seller Hardship:   Rent does not cover mortgage payment, medical, job loss

List Price:  $142,000

Seller Mortgage:  $188,000

Offer:  $135,000

Countrywide Appraisal:  $152,000 (higher than list price)

Buyer Counter:   $137,000

Countrywide Response 2 days before Foreclosure Sale:  “Offer will be denied.  It is too low.  Will only extend foreclosure sale if seller pays mortgage payment plus penalty.”

Wendy Rulnick:  “Seller cannot comply.  I challenge your appraisal. Countrywide just approved a different sale for a better house for $139,000.  I will send you comps and proof.”

“Quick Facts” Document sent to Countrywide:  Comps, market statistics showing months inventory, Countrywide’s demand letter approving a recent sale for similar price, and history of the property’s price reductions proving it could NOT sell for $152,000.

One Day Before Foreclosure Sale:  Approved.

The post Countrywide Short Sale Navarre FL: Case Study first appeared on Rulnick Realty.

I called AIG and they were right on top of it.  They said the loan was bought on NOVEMBER 5- a few weeks after the short sale offer was submitted!  The AIG rep did not seem pleased there had been a short sale in the works.  He said they should have been told when they bought the loan, and that “Countrywide dropped the ball”.  I wonder if they told him the property also had a foreclosure sale date set at the time?

I have two big problems with this.  One, is that Countrywide did not disclose pertinent and known information to me.  I worked over two months on their good word for approval, when they tell me it will all be moot depending on what AIG says.  Why didn’t they tell me this on November 5?  Second, they did not disclose to the PMI company about the status of the loan.  I have spoken to a local attorney who said there seem to be RESPA violations going on. He said there is a Florida doctrine “Holder in due course” which requires notification to a loan purchaser about anything affecting the loan prior to sale.  He said when that is the case, the second mortgage purchaser has legal defenses which allow them to hold the loan free and clear of all defenses a borrower may have against the original note holder.  He and my seller will go forward pursuing this if I run into a stone wall with these new negotiations.  I asked the Countrywide loss mitigation department if I could switch negotiators, as it is quite apparent I have been misled.  They said no.

The post Warning: Countrywide and PMI Short Sales first appeared on Rulnick Realty.